Haisler: Appealing assessment can reduce tax burden

April 24, 2013

When is enough, enough?

We’re speaking about property taxes, of course. Few topics get people as hot by even mentioning the word, and with good reason. Taxes are getting out of control and people are, quite literally, being taxed out of their homes.

Let’s take a quick look at some facts. According to the U.S. Census Bureau and depending on how you want to count, there are roughly 3,141 “counties” in the country. Ironically, the largest state, Alaska, has one of the fewest number of boroughs with just 20. Texas, on the other hand, has 254. Illinois has 102 counties and, while that number ranks us somewhere in the middle of the pack, we make up for it in other ways.

Illinois has nearly 7,000 taxing bodies, which makes it by far the the leader in the U.S. The No. 2 state, Pennsylvania, has 2,100 fewer taxing bodies. The good news, if you want to call it that, is that Illinois residents do not pay the highest amount of property tax in the nation. The East Coast clearly claims that designation with the states of New York, New jersey and Connecticut leading the way.

For example, Westminster County, N.Y., home to the Clintons, leads the nation as the highest taxed county. The rest of the top 15 counties are all within New York and New Jersey. But don’t think we’re out of the woods yet. According to Business Insider (March 2011) Kane County is No. 24 on the list of highest taxed counties and Lake County is No. 16. McHenry County ranks in the top 50 – not a distinction worth boasting about.

It is prudent to mention the old saying, “You get what you pay for.” Some places that have extremely low taxes, don’t include services. How would you like it if your house was burning down and the fire department either didn’t come or when they showed up asked you for your credit card? In some places, that is a reality. Frankly, most of us would prefer they put out the fire before qualifying us as customers.

Many of us bought our homes with school districts in mind – that has to be paid for. We want good teachers and administrators and decent buildings for our children – that costs money. We like good roads with as few potholes as possible. Some of us enjoy bike paths and nice parks. Maybe you have a library in your town; yep, that’s a taxing district.

So before we simply state “lower our taxes,” think about the services we receive. Which ones can you do without and would that impact the value of your home? If your school system wasn’t as good as it is, perhaps your house would be less desirable to buyers and, therefore, worth less. Lots to think about.

That aside, we would all like lower taxes. What can be done about it? Are there redundant services that would or could be more efficiently performed by merging departments? It’s certainly worth a look. Surely there are layers of government in Illinois providing the same or similar services that could be consolidated. This is not to suggest we fire people, but rather let’s look at combining departments, saving hard costs on buildings and equipment or buying in bulk. Perhaps we could combine planning departments, administrative staff, or accounting people and take advantage of economies of scale. Clearly, Illinois has too much government. No one can argue that.

Another way to reduce your tax burden is to appeal your assessment. If your assessed value is truly above market value, you should discuss this with your township assessor. Oftentimes, they will listen to your case and evidence (and be sure to have good evidence) and reduce your assessment without the formal process. If, however, that doesn’t work – appeal.

The appeal process isn’t complicated and can rather easily be conducted by a homeowner. The forms are rather simple once you really look at them. All you need is your current tax bill and good comparable property data. Many local real estate agents will be able to provide these for you. An agent who has experience with this process will be able to greatly assist you. Many real estate agents charge a fee for this service while others, especially if you bought or sold through them in the past, may offer it as a favor. Note, however, that the time frame for appealing is 30 days from when your assessment has been posted in the newspaper. They are published in the Northwest Herald starting from about August to perhaps October, varying by township.

Understand this, though: Appealing your assessment doesn’t automatically mean you will get a reduction or subsequently that your taxes will go down. As an example, let’s say someone appeals his assessment and gets the fair market value reduce by 10 percent. That doesn’t mean that the property taxes will be reduced by 10 percent. The two aren’t directly tied; they are certainly related, nonetheless. Taxes are calculated by the state and utilize an equalization factor.

But putting all that aside, the simple way to look at this is that the government needs money, and it’s going to get it. The question is, how much are you going to pay? So, in essence, when you appeal your assessment, you’re really just shifting the burden. That is, if your taxes go down, someone else’s probably went up.

It is our duty to read these important assessment documents that are sent to us and to call and ask questions if we don’t understand or disagree.

• Jim Haisler is the chief executive officer for the Heartland Realtor Organization, a not-for-profit 501c6 corporation providing products, services, education, and assistance to more than 800 real estate professionals in northern Illinois.